HomeBusiness DigestGovt intensifies austerity measures

Govt intensifies austerity measures

GOVERNMENT officials, including ministers, are now expected to spend less time on government-issued cellphones as the fiscus intensifies efforts to curb unnecessary expenditure.

Finance minister Tendai Biti in his midterm budget statement last week said government had so far in this financial year accumulated US$21,7 million in arrears.

To reduce spending, government officials would be restricted in using mobile phones, vehicles, fuel allocation and foreign travel, some of which are “ not commensurate with the benefits to the economy”.
The arrears are on utility bills such as electricity, water, telephones and vehicle hire.
 Biti said in line with his “you eat what you gather” policy and in an environment characterised by shortage of resources, the results based budgeting (RBB) allows government agencies to achieve their micro and macro level results in a more coordinated systematic, integrated and cost effective manner.
Biti said he would set airtime limits for government officials and convert existing contract lines into pre-paid lines.
“For those still on contract lines, service providers will be requested to withdraw ability to make a call on contract lines that exceed set spending ceilings. In addition, government will streamline the number of government officials warranting provision of handsets and air time allowances,” he said.
The Finance minister said as of June outstanding bills for CMED vehicle hire charges stood at US$6,7 million, and continue to grow.
To curb this, he said, Treasury in consultation with CMED is working on a new billing system as the current one which provides for payment of flat monthly fixed charges per vehicle (dead mileage) of US$1 000 (2 500km at $0,40 per km) “encourages unnecessary use of government vehicles, subsequently leading to high demand for fuel”.
He said, currently, CMED imposes a charge that penalises ministries should a vehicle on hire not clock a minimum mileage of 2 500km.
On fuel consumption by government which according to Biti is a cause of concern, he proposed “setting fuel consumption limits for senior officials, setting fuel consumption levels per ministry, with the cap informed by nature of duties”.
On foreign travel, Biti said a disproportionate share of revenue is being spent on foreign travel adding that in certain instances, ministries are initiating foreign travel requests which were not commensurate with benefits to the economy.
“Expenditures related to foreign travel have been at levels that, if sustained over the course of the year, will crowd out other operational costs. I propose that expenditures on foreign travel be limited to a given allocation with travel approvals related to availability of funds.”
 Government has spent US$11 million on foreign trips aimed at raising resources in support of Sterp requirements.

Nqobile Bhebhe

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